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  Jeff Bailey   2/19/200,  6:16:09 PM
Pivot Matrix for tomorrow at this Link

Not sure if everyone saw Jim's 14:39:33 post regarding some of the various Max Pain values. I'm just seeing them tonight, and will include Jim's post in tonight's wrap.

  Jeff Bailey   2/19/200,  4:58:33 PM
Closing Internals at this Link

  Jim Brown   2/19/200,  4:00:18 PM
Earnings after the close:

HPQ est +0.35, act = +0.35 guided inline
UVN est +0.16, act = +0.17 beat
JWN est +0.66, act = +0.74 beat
MDRX est +0.00, act = +0.00 inline
BEAS est +0.09, act = +0.10 beat
OCLR est +0.42, act = +0.43 beat
PTEK est +0.10, act = +0.11 ($.45 was for the year)
SRNA est +0.21, act = +0.22 beat guided inline
WFII est +0.11, act = +0.11 inline

BUD affirmed growth estimates
PTNX stock halted on news that printer orders are lagging

  Jeff Bailey   2/19/200,  3:56:41 PM
Semiconductor Index (SOX.X) 514.86 -1.45% ... right back to WEEKLY Pivot of 515.35.

  Jeff Bailey   2/19/200,  3:55:12 PM
Banks (BIX.X) 354.60 +0.37% and Oil (OIX.X) 327.58 +0.45% sector winners.

  Linda Piazza   2/19/200,  3:54:22 PM
Thanks, everyone, for your answers about E-mini contracts.

  Jane Fox   2/19/200,  3:53:37 PM
Linda, when I used TS I used a continuous contract and never worried about the switch for they did it for me, at least for charting. I agree with Keene in that for trading I will make the switch usually on Thursday the week before expiration.

  Linda Piazza   2/19/200,  3:45:41 PM
Thanks, Keene, for your answer to my 15:23 post. I knew there were volume issues related to when to switch to the next contract, but I just didn't know when volume typically dropped so low that you'd want to switch. Thanks for the guideline.

  Jeff Bailey   2/19/200,  3:44:02 PM
QQQ $37.11 -1.14% ... session low has been... $37.02.

  Keene Little   2/19/200,  3:43:51 PM
Linda, just saw your 15:23 post. Futures contracts expire as you've stated but most traders will start switching over to the new front month contract as early as a week prior. Personally I like to watch volume on each to figure when's a good time to switch over.

  Ray Cummins   2/19/200,  3:40:09 PM
Spreads/Combos -- E-mail Replies: A great question on position management

Ray, [I am] Curious about your MM comment on taking the 0.50 quick profit on the NEOL [synthetic long] play. I am in the play, but never touched it. That's only half the initial target. What would have prompted me to take that profit? Now dropping back on no news. Curious as to what would have led me to choose to take that profit, instead of looking for the initial target? MA

Hello MA, In any position, you should always consider taking "early-exit" profits when the opportunity arises. In the case of NEOL, a gain of $0.50 ($50 per contract) against a collateral requirement of approximately $715 per contract, in less than one week, is certainly a favorable outcome. You mentioned the profit target ($0.95-$1.40), but that applies to a longer (expected) holding period, possibly up to two months. If you calculate the annualized return for the "early-exit" profit, you will see how positively the comparison favors the short-term trade. That doesn't mean YOU should close the play early, but rather that a very profitable exit opportunity has occurred. Hope that helps!

  Linda Piazza   2/19/200,  3:36:39 PM
The OEX finally broke out of that consolidation pattern on its 60-minute chart, falling below the trendline off the 2/05 low, and it did it with some violence, too. The longer it travels along that equilibrium level on the Keltner channels, the more violent the breakout usually is. Trouble is, first, that the move was so violent, that it was impossible to get in unless you had an order parked. The next trouble is that the OEX dropped so quickly that it's already at bottom Keltner support, which just happens to closely coincide with the 60-minute 100-pma at 566.64. There should be a bounce attempt somewhere along through here, although there may not be now that the rush to the exits has begun. That might build a momentum that won't be stopped until the end of trading.

I knew I didn't trust that inverse H&S. It just didn't fit the parameters of an inverse H&S.

  Jeff Bailey   2/19/200,  3:33:09 PM
Sears (S) $45.76 -0.17% .... sudden move lower. While LEAPS options in S have greatest open interest, swing trade bears will want to be alert into tomorrow's trade. The Feb $45 puts (SNI) and Feb $45 calls are heaviest open interest for February.

  Linda Piazza   2/19/200,  3:30:30 PM
Like the SOX, the TRAN had pushed higher today only to fall back, leaving a long shadow above the candle body. The TRAN currently is below the 2919.27 level that marks the 38.2% retracement of the recent plunge. So, is this a bull-flag pullback the last week, a pullback before another bounce, or is this last week's pattern just part of the expected rollover beneath that 50% retracement level? I don't know yet, but until and unless the TRAN can sustain values above that 50% retracement, this remains only a relief bounce that rolled over beneath resistance.

  Linda Piazza   2/19/200,  3:23:13 PM
Reader Question: Since you did such an admirable and thorough job explaining the settlement dates and procedure on the SPX options, can you tell me when the E-mini futures (ESH4) stop trading in March and we have to switch to the June futures? March expiration will be a triple witch. Right?

Response: Last question first. Yes, March is a triple witching month, along with June, September, and December. For those not familiar with the term, stock index futures, stock index options, and stock options all expire on triple witching months. For those options traders that might have missed the information earlier this week, here's a calendar that shows options expiration dates: Link

As to the E-mini, I'm out of my league there, as I don't currently trade futures, and I know there are issues related to volumes traded that might make you want to switch over ahead of the actual expiration on the E-mini, but here's a CME page listing the product calendar for the e-mini: Link To summarize information on E-mini futures settlement and the last time to trade before expiration, CME includes the following information: E-mini quarterly contracts expire at the same time and to the same price as their larger counterpart contracts. For quarterly futures contracts, trading can occur up to 8:30 a.m., Chicago time, on the third Friday of the month. Here's a FAQ page on the E-mini.

Can one of you futures writers chime in on the best time to switch over?

  James Brown   2/19/200,  3:13:36 PM
If you're following retail stocks check out Big Lots Inc (BLI). The stock is breaking out over resistance at $15.00-15.25 after producing a nice bottoming pattern over the last 3-4 months. The company is due to announce earnings on Wednesday, Feb. 25th.

  James Brown   2/19/200,  3:07:50 PM
...a reminder HPQ announces earnings after the bell. Estimates are 35 cents. Of course they sort of preannounced last week ahead of Dell's earnings.

  Jeff Bailey   2/19/200,  3:07:32 PM
03:00 Internals at this Link

  Linda Piazza   2/19/200,  3:05:32 PM
Hmm. Very interesting. Remember that I mentioned seeing that possible bearish rising wedge on the SOX, but that one argument against that possibility was that the SOX had moved above a 50% retracement of the 1/12-2/4 drop? The SOX has since dropped back below that 50% retracement level, at about 527. In fact, the SOX is in the process of printing a very bearish-looking candle at the top of its recent rise. We've still got almost an hour of trading ahead of us, however, so that candle could change another two or three times before the close.

  James Brown   2/19/200,  2:55:06 PM
ASD is breaking out over the $108 level, which has been resistance for the last 2 1/2 weeks but shares still have potential resistance near $111.

  James Brown   2/19/200,  2:50:33 PM
It looks like Quest Diagnostic (DGX) is trying to fill its gap from January. The stock is down 2.5% and has broken the top of the gap level. The $80.00 mark might hold as support but the bottom of the gap is near $78.00, which also happens to be near the bottom of DGX's rising channel.

  Linda Piazza   2/19/200,  2:47:58 PM
It's possible to draw that upper trendline on my 14:44 chart a little differently, beginning it at the 1/26 high, cutting off the candle shadows from 2/11 and then extended it into the present action. That trendline would cross at just over 572, and would be a descending trendline, too. I don't know which is most valid.

  Linda Piazza   2/19/200,  2:44:02 PM
I haven't been saying a lot about expected direction for the OEX today, and here's why: Link

  Jeff Bailey   2/19/200,  2:41:41 PM
Newmont Mining (NEM) $44.00 +0.87% ... here's intra-day type of chart I'm monitoring in NEM right now. Link

  Jim Brown   2/19/200,  2:40:09 PM
Moskow - does not expect strong job growth this year.

  Jim Brown   2/19/200,  2:39:33 PM
Max Pain Numbers for February

SPX 1125
NDX 1500
OEX 565
QQQ 37.00
DIA 105
DJX 105
SOX 510
SMH 42.50
RUT 570
MSFT 27.50
INTC 32.50
MMM 80.00
IBM 95.00
EBAY 65.00
YHOO 47.50
NEM 42.50

  James Brown   2/19/200,  2:36:54 PM
Aggressive traders may want to keep an eye on EBAY. The stock is still battling with resistance at $70.00 but its recent sideways consolidation has narrowed to a $2 range. A trigger over $70 could work as an entry.

  Linda Piazza   2/19/200,  2:34:42 PM
Reader Question: On these Keltner(s) can you please tell me the different settings? Source? Exponential?

Response: The settings I use are borrowed from another trader, but the way I use them are methods I've developed over the months I've been watching them. Those borrowed settings are all exponential and all use AvgHLC as the source, and otherwise are as follows: shortest-term channel (length 9, multiplier 1.4), mid-length channel (length 45, multiplier 3), longest-term channel (length 120, multiplier 7.2). For the OEX and most other major indices, I watch them on a five-minute chart. These lengths and multipliers tend to work well on the indices on the five-minute chart, and less well for some individual stocks, but just fiddle with the settings and experiment on the stocks or indices you trade most frequently. The colors aren't important, of course. Just set them so that you can distinguish the different channels from each other, and the channel boundaries from the midlines. I use a bolder line for the boundaries, for example.

  James Brown   2/19/200,  2:33:26 PM
United Health (UNH) is breaking out over the $61 level and hitting a new all-time high.

  Jeff Bailey   2/19/200,  2:33:01 PM
Randgold Res. (GOLD) $22.20 +0.63% ... getting some order flow at the bid and afternoon lows. While much more thinly traded than a Newmont (NEM), shares of GOLD don't appear to by on any gold bug's buy list in recent weeks.

  James Brown   2/19/200,  2:28:33 PM
Since Linda is talking about banks I noticed that Wachovia (WB) is breaking out over the $48 level and is currently trading at new all-time highs, above its November 1998 highs.

  Linda Piazza   2/19/200,  2:25:45 PM
If the BIX were to close at its current level, it would have achieved a new closing high. Previous to this, the closing high was 355.28, achieved on 2/11. The BIX is currently at 356.00, but there's still a lot of time between now and the close of trading, and almost anything can happen. So far, it has not been able to climb above the 2/17 intraday high of 356.72, although it came close. It goes without saying that the Keltner channels show the BIX to be overbought on a short-term basis.

  Ray Cummins   2/19/200,  2:25:43 PM
Spreads/Combos/Premium-Selling -- Market Movers: Sohu.com (NASDAQ:SOHU)

Shares of SOHU appear to be starting another leg a down as the stock is $1.17 lower at $27.53 after a one-day bounce on the positive earnings news from Netease.com (NASDAQ:NTES). Traders who agree with a neutral-to-bearish outlook for the issue should consider a short call position (or call-credit spread) at the $35 strike in March.

  Jeff Bailey   2/19/200,  2:18:49 PM
NASDAQ-100 Volatility Index (VXN.X) 23.33 -1.76% ... most active options are Mar. $37 puts, Feb. $38 calls, Feb. $37 calls and Mar. $38 calls.

This really suggests a range from $37-38 into Friday's close.

Should have taken a shot at a swing trade short from $37.80 earlier this morning.

  Linda Piazza   2/19/200,  2:17:39 PM
The OEX keeps verging on confirming that inverse H&S on the five-minute chart and climbing above the descending trendline off the 2/11 high, but it keeps turning back just before doing so. The five-minute Keltner charts show the OEX still settling into an equilibrium position, with a breakout due but not being produced. Like the BIX yesterday, the OEX is getting squeezed tighter and tighter between that descending trendline and support, with support this time being from an ascending trendline that's held up since 2/04. That ascending trendline now crosses at about 569, near the site of the 30-minute 100/130-pma's. So, a move under 569 or over 572 should break the OEX out of its current consolidation pattern. As I warned yesterday, though, an upside break just moves the OEX deeper into a resistance zone from its weekly chart.

  Jeff Bailey   2/19/200,  2:14:37 PM
02:00 Internals at this Link

  Ray Cummins   2/19/200,  2:00:06 PM
Spreads/Combos -- Another Profitable Straddle: Credence Systems (NASDAQ:CMOS)

Shares of CMOS hit a recent high of $14.50 early in today's session after the company said its fiscal first-quarter loss narrowed, and announced it expects to earn a profit in the second quarter. The news was great for investors and straddle traders alike as it provided a gain of up to $0.75 on $1.00 invested in our delta-neutral position, in less than one week.

  Linda Piazza   2/19/200,  1:47:36 PM
That potential inverse H&S on the OEX five-minute chart is still in play, although I'm still as skeptical as I was earlier of this formation, since it formed as a continuation pattern and not a bottoming pattern and since there was no bullish divergence as the head was formed. I remember typing those same words in reference to a similar formation on the SOX intraday chart a few weeks ago, however, and . . . you guessed it. The thing hit the neckline and zoomed up, meeting the projected upside target. That's why I'm mentioning it now, not because I believe strongly in its potential. However, there is one little congruence that keeps me interested in this formation. The new descending trendline off the 2/11 high now crosses at about 571.80 and that's a descending line, of course, so it soon will cross at about the neckline level for the potential inverse H&S. A breakout over one would be a breakout over the other.

  Ray Cummins   2/19/200,  1:43:32 PM
Spreads/Combos/Premium-Selling -- Entry Point?: Neopharma (NASDAQ:NEOL)

Shares of NEOL are in "full retreat" today, backpedaling to a recent consolidation area near $20, despite a lack of public news. The sharp rally earlier in the week provided an excellent "early-exit" profit ($0.50+) in our bullish synthetic position and traders might consider today's pullback as a new "put-selling" opportunity at the $15.00 or $17.50 strike in March.

  Linda Piazza   2/19/200,  1:40:32 PM
Thanks, Jonathan, for the information on Quotetracker. I thought that might have Keltner channels, but I wasn't sure.

  Jeff Bailey   2/19/200,  1:39:47 PM
Buy Prog. Prem. Alert

  Jonathan Levinson   2/19/200,  1:39:40 PM
I use Quotetracker for my intraday work.

  Linda Piazza   2/19/200,  1:39:03 PM
Reader Question: Where do you find Keltner channels? Any free chart co. have it? My broker doesn't.

Response: Anyone know the answer to this? I use Q-charts.

  Linda Piazza   2/19/200,  1:27:01 PM
Continuation my to 13:12, 13:13, and 13:15 posts: The OEX found support just where the nested Keltner channels suggested they would. Now those channels suggest next resistance at the current level, at 571.07, 571.46, and then 572.86. Support still gathers from 570.22-570.43, with next support below that at 569.39 and 567.59. (Note: The OEX turned over at that resistance as I typed, and now tests central channel support.)

I forgot to mention that the more thickly the various lines gather in a certain spot, the strongest the support or resistance can usually be considered. When the lines separate, the OEX tends to move through them more quickly, but central Keltner channel support, green on my charts, and the outer boundaries on the blue, shortest-term channel should always be considered strong support or resistance. Therefore, a breach of that central channel support, as just happened as I typed, shows considerable weakness.

  Jeff Bailey   2/19/200,  1:26:19 PM
Sell Prog. Prem. Alert

  Ray Cummins   2/19/200,  1:25:50 PM
Spreads/Combos/Premium-Selling -- Market Movers: Biogen-Idec (NASDAQ:BIIB)

Jeff Bailey mentioned the upside activity in Biogen-Idec earlier today and the bullish move has definitely been favorable for our recent put-credit spread in the issue. Obviously, the current price is a little steep for a (long) call position but traders who believe the trend will continue might consider selling the MAR-$50 put on a pullback to the 10- or 18-DMA.

  Ray Cummins   2/19/200,  1:17:00 PM
Spreads/Combos -- Market Movers: Intuit (NASDAQ:INTU)

Intuit is another company suffering from extreme "post-earnings" selling pressure. Shares of INTU are down $3.20 at $45.99 after the company exceeded earnings expectations for its fiscal second quarter, but also said third-quarter results will likely fall short of some analysts' estimates. Investors were not pleased with the latter comment and the resultant heavy-volume decline appears certain to "turn the tide" in the issue's recent lateral price activity. In fact, the "gap-down" at the opening bell left traders in bullish positions with very little time to initiate an effective exit, however they may be able to recoup some of their losses with a short call (or call credit spread) at the $50 strike in March.

  Linda Piazza   2/19/200,  1:15:01 PM
My 13:12 and 13:13 posts continued: My favorite way of using the nested Keltner channels, though, is to pinpoint likely support and resistance, and I've found them uncanny at performing that function. Here's what I was seeing a couple of minutes ago, as I was uploading the chart: Link

  Linda Piazza   2/19/200,  1:13:49 PM
My 13:12 post continued: Once the outer Keltner boundaries (purple on my charts) are touched or breached, there's usually a push to establish that equilibrium again, so after the buying or selling pressure wanes, there's usually a return to the central Keltner channel support or resistance again. If the pressure had been too extreme, sometimes prices are slung all the way to the opposite side of the Keltner channels. That's what happened after the breakout I showed in my first chart. The OEX breakout became so extended that the OEX was slung back to the bottom Keltner channel support: Link When I see those outer Keltner channels breached, I start warning traders to follow the OEX with close stops, as it's deeply oversold or overbought on a short-term basis, but can continue to move in the direction of their trade because it could be giving a valid breakout signal. To be continued.

  Jeff Bailey   2/19/200,  1:13:19 PM
Newmont Mining (NEM) $44.05 +0.96% ... backing off its highs. On 5-minute chart, I see the potential for a little reverse h/s pattern. Take your retracement from the bottom of $44.03, place neckline (50%) at $44.00, and gives objective back up to $44.96. This $44.96 is where NEM got slammed yesterday.

Will take a note, might be handy in the future.

See how NEM's session high of $44.24 came at this 61.8% retracement?

  James Brown   2/19/200,  1:13:09 PM
I was only half listening to CNBC but it sounded like Panera Bread (PNRA) was partly trading lower due to higher butter costs!? The company did announce earnings today. The numbers were inline with estimates at 32 cents but management sounded too cautious on its conference call and investors don't seem happy with the new earnings guidance adjusted for an accounting change over its new join venture partner program.

The stock is down 10% and breaking through support at its 200-dma and the $40.00 level. Volume is very high at 2.9 million shares (vs. the average at 800K).

  Linda Piazza   2/19/200,  1:12:13 PM
Reader Question: Jane forwarded this question to me from an experienced trader who you've often heard quoted on these pages: Could you please explain the concept & application of "nested" Keltners (on a QC time-based platform, as opposed to tick-based)? Or, please forward the question to Linda.

Response: When watching the nested Keltner channels on a time-based Q-charts platform, I use settings borrowed from another trader, but I use them somewhat differently than other traders might. I'm using different lengths and different multipliers (see Jane's article for a discussion of how these impact the channels), and then watch how the different channels cycle within each other. The goal of the channels, if I can anthropomorphize them a bit, is to reach equilibrium, so that they're all lined up within each other, with their central lines congruent with each other. There's that old saying about nature abhorring a vacuum, and the markets abhor equilibrium, too, so that once that equilibrium state is reached, a breakout is usually predicted after a period of time trading near that equilibrium level. Here's an example: Link To be continued:

  Jim Brown   2/19/200,  1:09:06 PM
I do not know how many readers have been hearing about the coming "pandemic" but researchers suspect it will be prompted by a bird flu epidemic on a global scale. The current bird flu outbreaks are very troubling for those who are following this trend in research. Basically a strain of bird flu mutates with a human flu to create a super flu. The last pandemic in 1918 killed 20 million people. Researchers estimate the next pandemic could kill 100 million and it is not a question of "IF" but only a question of "when" it will occur.

  Jeff Bailey   2/19/200,  1:08:51 PM
01:00 Internals at this Link

  Ray Cummins   2/19/200,  1:06:13 PM
Spreads/Combos -- Market Movers: KOS Pharmaceuticals (NASDAQ:KOSP)

Shares of KOSP have been moving backwards since Wednesday morning and the activity continued today with the issue recently down $3.02 at $47.17. Apparently, investors were disappointed with the company's lackluster earnings forecast, even though fourth-quarter profits more than tripled on surging cholesterol-drug sales. For the first quarter, Kos expects earnings of 25 cents to 30 cents per share, but analysts were looking for 37 cents per share in that period. KOSP commented on the disparity, saying it incurs "substantial costs" in the first quarter each year due to its national sales meeting and some one-time royalty payments. The company also noted that a tendency by customers to stock up on cholesterol medicines in December typically slows first-quarter sales. In any case, the issue appears to be in the midst of a massive trend reversal and traders who favor "premium-selling" plays might consider the $55 call (in March) a viable short position.

  Jim Brown   2/19/200,  1:03:15 PM
Canada now reporting a current case of the bird flu.

  Jeff Bailey   2/19/200,  12:56:47 PM
Intel (INTC) $30.57 -0.06% ... after gap higher to $31.10, its been a downhill slide intra-day.

Joins Natl. Semiconductor (NSM) $40.06 -0.59% for only two SOX components currently in the red.

  Jane Fox   2/19/200,  12:51:39 PM
A 42-count indictment was unsealed today accusing Jeffrey Skilling, the former Enron chief executive who resigned months before the company shattered in scandal, and Richard Causey, Enron Corp.'s former chief accounting officer, of participating in widespread schemes to mislead government regulators and investors about the company's earnings. Mr. Causey was indicted a month ago and is free on a $500,000 bond. Prosecutors said Mr. Skilling faces a maximum total of 325 years in prison and over $80 million in fines if convicted of all the counts. Another court appearance for Mr. Skilling was set for March 11. And the Beat Goes On.

  Jeff Bailey   2/19/200,  12:51:00 PM
U.S. Dollar Index (dx00y) $85.88 (unch) (30-minute delayed) ... I do see where the dollar fell to session low of 85.69 on that 12:00 PM EST release of February Philly Fed.

  Ray Cummins   2/19/200,  12:50:49 PM
Spreads/Combos/Premium Selling -- Market Movers: Millicom Cellular (NASDAQ:MICC)

The popular global telecommunications investor is trading higher today, up $2.17 at $90.42, mostly due to the bullish activity in the broader market. However, some investors believe that Tuesday's 4-for-1 split announcement may be a catalyst for share purchases in the near-term. The stock split will be effective on February 20, 2004 with a record date of February 17, 2004, so traders should expect some volatility in the coming week. In addition, it doesn't look like we will be able to initiate the new, bullish credit-spread (at $75) in the issue.

  James Brown   2/19/200,  12:47:30 PM
Shares of Barnes & Noble Inc (BKS) were halted earlier today for news pending. The company announced that earnings for FY04 would be at the high end of its range. BKS expects Q4 (ending Jan. 31st) sales to be $1.3 billion, a 10% jump from a year ago. Same-store sales for the fourth quarter were up 6.4% and up 7.8% in January alone.

The stock is currently trading near two-year highs above long-term resistance at $35.00.

  Jeff Bailey   2/19/200,  12:44:56 PM
Newmont Mining (NEM) $44.19 +1.28% ... now at session high. Found support at 21-day SMA, similar to $HUI.X 231.20 +0.28%.

Randgold Res. (GOLD) $22.29 +1.04%

  Jeff Bailey   2/19/200,  12:42:00 PM
TASER Intl. (TASR) $55.62 -6.09% ... stock dropping quickly from $59 level last 20 minutes.

  James Brown   2/19/200,  12:41:29 PM
Meanwhile, in the same group (homebuilders), JPM has upgraded Centex (CTX) from "neutral" to "over weight" claiming the stock trades at a discount to its peers. Shares are up 1% to $102.37 but remain under their 50-dma and below the top of its Feb. 2nd gap down.

  Linda Piazza   2/19/200,  12:39:26 PM
Whether that inverse H&S on the OEX five-minute chart has any validity or not, it's close to being confirmed by a push across the neckline. That would happen near 571.60, I believe, although it's possible to construct the neckline different. The upside target would be above 575, also depending on how the neckline is constructed. I'm skeptical of this formation for the reasons I mentioned earlier, but I've seen some of these confirm and then meet their upside targets lately.

  James Brown   2/19/200,  12:38:47 PM
Details were not available but CSFB has cut D.R.Horton (DHI) from neutral to under perform. The stock pulled back to the $30.00 level of support and bounced.

  Linda Piazza   2/19/200,  12:36:07 PM
No, it's my eyes, James, mixing up point rise with percentage. I do know the difference, but just got carried away there.

  James Brown   2/19/200,  12:35:02 PM
KLA-Tencor (KLAC) is up 3.55% on the strength in the SOX and an upgrade to "out perform" from Prudential. Shares are rebounding from its recent lows near its 200-dma and are currently trading right at its 50-dma. Technical oscillators are turning bullish.

  Linda Piazza   2/19/200,  12:34:14 PM
Nix that last post about the BIX. It's up more than .80%, not more than 2.80%.

  James Brown   2/19/200,  12:31:34 PM
Lunch hour sector update...

DDX disk drives: +2.37%
SOX semiconductors: +1.79%
XAL airlines index: +1.1%

NWX networkers: -0.55%
GSO software: -0.34%
XNG natural gas: -0.32%
XAU gold&silver: -0.12...pared its losses!

  Ray Cummins   2/19/200,  12:30:39 PM
Spreads/Combos -- E-mail Replies: Position Management

(condensed) Ray, I do most of my option trading with covered-calls (and a few LEAPS) but I have started learning about naked puts. I plan to sell some puts on stocks for my long-term portfolio, but I saw a warning in your section about using stops on every play. Does this mean I should use stops even on the stocks I want to own? TM

Hello TM, Regardless of the strategy you favor, learning to correctly manage portfolio positions; maximizing gains while limiting losses, is one of the most important aspects of successful trading. There is a good reason why many traders lose money in the options market. Most of them have yet to learn the primary law of trading: the market will do whatever is necessary to prevent the uneducated masses from making money while consistently rewarding the astute professional minority. With that idea in mind, the first thing an investor must realize is they should rarely hold a position (stock or option) without a loss-limiting "stop" order. The majority of market professionals use protective stops but the retail trader is far less proficient in this practice. The reason is experienced market players know that using stop orders eliminates the risk of emotional or reaction-based judgments in difficult situations and removes fear, hope, and greed from the entire equation. The consistent use of this technique provides a mechanical and disciplined method for achieving profit an allowing the market to make the exit decision is much more precise than relying on our complex human intuition.

  Linda Piazza   2/19/200,  12:30:24 PM
The BIX is breaking out of the upper Keltner channel, giving a breakout signal, but also warning those who might be long stocks in this index to protect gains. The BIX is approaching its intraday high of 356.72, recently reached, so we have historical and Keltner resistance coming together with the BIX now very extended on a short-term basis. However, as we've warned, Keltner channels can give valid breakout signals, too. This is a time to protect long profits without it necessarily being a time to choose a bearish play, as the BIX could climb this channel for a while now.

  Jeff Bailey   2/19/200,  12:28:12 PM
12:00 Internals at this Link

  Jeff Bailey   2/19/200,  12:24:01 PM
Dow Industrials (INDU) 10,742.96 +0.67% ... session highs.

  Linda Piazza   2/19/200,  12:13:18 PM
The BIX is seeing big gains since breaking above the descending trendline that had pressured it lower yesterday. It still looks as if it's trying to reach for those recent intraday and closing highs, with the intraday high at 356.72. It's going to hit upper Keltner resistance at just under 356, however.

  Jim Brown   2/19/200,  12:02:31 PM
Link to complete Philly Fed report: Link

  Jonathan Levinson   2/19/200,  12:01:56 PM
*DJ Philadelphia Fed Feb Price Paid 43.7 Vs Jan 35.3

  Linda Piazza   2/19/200,  12:01:48 PM
For those who might have noticed a possible inverse H&S on the OEX five-minute chart, here's my take on that: Link No one has written me about it yet, but I thought some might be watching this formation.

  Jonathan Levinson   2/19/200,  12:01:46 PM
*DJ Philadelphia Fed Feb New Orders 27.8 Vs Jan 36.5

  Jim Brown   2/19/200,  12:00:00 PM
Philly Fed for February = 31.4 (est was 36.5)

  Jim Brown   2/19/200,  11:55:53 AM
Five min until the Philly Fed - estimates are for 36.5 and down from last months 38.8

  Jeff Bailey   2/19/200,  11:53:02 AM
Elan (ELN) $13.69 +16% Link ... another big gain today and once again most actively traded on the NYSE at just over 33.16 million shares.

Biogen Idec (BIIB) $58.17 +9.26% Link ... also adding handsome gains. I must say I'm a bit surprised at these additional gains. MARKET must really know something about this new drug.

Action reminds me a bit of Forest Labs' (FRX) $73.00 -1.36% Link run from the mid-$50 level.

  Jane Fox   2/19/200,  11:48:10 AM
Remember the Philadelphia Fed is scheduled for release at 12:00 ET

  Linda Piazza   2/19/200,  11:47:32 AM
The BIX is now climbing above broken support from earlier in the week, and also above the descending trendline off the 2/17 high, a trendline that pressured it lower yesterday. It's at 354.72, near a level of historical resistance on its 30-minute chart, and looks as if it's ready to charge higher to challenge its recent high of 356.72. "Looks" might be the operative word, however, as the BIX remains within a consolidation pattern on that daily chart, close to a breakout but not there yet.

  Jeff Bailey   2/19/200,  11:44:08 AM
AMEX Gold Bugs Index ($HUI.X) 229.24 -0.56% ... I think our old "fitted" retracement chart doing a pretty good some of showing some near-term levels of support/resistance today. Yesterday I thought break below 230.37 would see quick decline to 226.00, and for most part, HUI.X has followed that trade.

U.S. Dollar Index (dx00y) 85.94 +0.04% (30-minute delayed) did trade a session high of 86.24 (10:25 AM EST), but found selling just below correlative DAILY R1 and WEEKLY R1 86.30.

I begin to tie that 86.30 level with HUI.X 226.00 support.

  Linda Piazza   2/19/200,  11:36:44 AM
Dare I speak these dirty words? Does the SOX climb (on the daily chart) since 2/04 look like a bearish rising wedge to anyone else but me? The trouble--besides the fact that numerous "bearish" rising wedges rose into infinity this last year--is that today's rise in the SOX has taken it above a 50% retracement from the 1/12 high to the 2/04 low, and that shouldn't happen if the bounce is to be viewed as bearish. That 50% retracement occurred at near 527. Because these formations have not been predictive of likely action lately, I'm not expecting this one to be, either, but just keeping my eye on what's happening.

  Linda Piazza   2/19/200,  11:24:46 AM
The OEX is retesting central Keltner channel resistance again, from the underside this time. So far, it's been finding support in this 569.50-570.50 zone, with various types of support gathering within this zone. One type is the daily pivot just below the five-minute low hit a few minutes ago.

The BIX has been finding support at its weekly pivot today, halting the BIX's descent toward the bottom of the ascending regression channel in which it's been trading this month. Of course, the 30-minute 100/130-pma's are also near that weekly pivot, so it's difficult to say which is supporting the BIX or whether all are. The BIX comes up now to test the broken support from Friday through yesterday morning, however, so faces resistance at the current level and just above.

  Jeff Bailey   2/19/200,  11:13:22 AM
11:00 Internals at this Link

  Linda Piazza   2/19/200,  11:05:59 AM
OEX 568.40 is one level to watch today, as that's the current site of the ascending trendline off the 2/05 low, and a move below that level would signal a breakdown below that trendline. As I mentioned this morning, we see other support levels near and below this, including the 30-minute 100/130-pma's, currently at 568.16 and 567.51. I don't know that I'd jump on a bearish position on a breakdown below that trendline, when such a breakdown occurs just ahead of a test of the 30-minute 100-pma. Difficult decision.

  Linda Piazza   2/19/200,  11:01:43 AM
We now have a confirmed lower five-minute high on the OEX, a first confirmation of bearishness this morning.

  Linda Piazza   2/19/200,  10:51:34 AM
Central Keltner channel support sagged a bit but finally held on the OEX five-minute chart. Now the OEX bounces. Bears want to see a lower five-minute high while bulls want to see a higher five-minute high.

  Jim Brown   2/19/200,  10:45:21 AM
A couple readers asked for a link to Jane's Traders Corner article from last night. Link

  James Brown   2/19/200,  10:40:54 AM
Yesterday Biogen Idec (BIIB) soared 20% after its marketing partner Elan (ELN) announced that they would pursue an FDA approval on their Antegren drug, a treatment for multiple sclerosis, a year earlier than expected. Today BIIB is up another 8.73% after a wave of analysts upgraded the stock this morning. Merrill ups BIIB to a "buy". Sanford Bernstein to an "out perform". CSFB to an "out perform". Wachovia to an "out perform". Piper Jaffray to an "out perform". Yesterday A.G.Edwards and First Albany bothed upped BIIB to a "buy".

Meanwhile ELN is up another 17.3% on top of yesterday's 34% gain.

  Linda Piazza   2/19/200,  10:37:32 AM
Here are a couple of things I'm noticing about the BIX on its 60-minute chart: Link

  James Brown   2/19/200,  10:35:01 AM
Just a couple of days ago I reported that Fulcrum had started RadioShack (RSH) with a "sell" rating based on valuation. Today the stock is up 7.3% to $35.77 after reporting earnings that beat estimates by 5 cents. Analysts were looking for 72 cents and RSH turned in 77 cents per share. The company reaffirmed its current outlook for 2004. RSH has now achieved its P&F target of $35.50 and the $34 level should become new support.

  Jeff Bailey   2/19/200,  10:34:16 AM
Swing trade short alert ... Randgold Resources (GOLD) $22.11 +0.23% here, stop $22.42, target $21.05.

  Jane Fox   2/19/200,  10:32:21 AM
Thank you Jim and Linda.

  Jim Brown   2/19/200,  10:31:15 AM
That really was a good article on Keltners last night. Good job Jane!

  James Brown   2/19/200,  10:30:05 AM
Intuit Inc (INTU) reported earnings last night that beat estimates by 7 cents but the company guided lower for the current quarter and is suffering for it today. The stock is off 5.75% and gapped open below its simple 200-dma but is holding above the $45 level.

  Jeff Bailey   2/19/200,  10:28:40 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   2/19/200,  10:28:04 AM
One thing I always like about Jane's articles about some technical analysis tool is that she gives lots of background about the tool, how it was developed, formulated, and intended to be used. She did that last night with Keltner channels, too. She and I use a different setup, as I use three nested channels with different lengths and multipliers, but I learned a lot from her article. Read it if you haven't yet. I've been watching Keltner channels for several months now, and I wouldn't trade without Keltner channels any longer.

  James Brown   2/19/200,  10:26:58 AM
Hmmm... there is an interesting divergence here. Copper is once again trading higher (+1.34%) but shares of Phelps Dodge (PD) are down 1.3%. Looks like a test of the $80 level may be a good bet.

  Jane Fox   2/19/200,  10:25:35 AM
Linda, I most definitely am a Keltner Channel convert. (10:21 post)

  Linda Piazza   2/19/200,  10:24:57 AM
The OEX is now slipping beneath central channel Keltner support, beneath the 50% retracement of the first five-minute range, and beneath the 30-minute 21-pma. However, it's still close enough to all of these that we can consider the OEX to be still testing these support levels. (It's bouncing a bit as I type, but not much.) I do expect a bounce attempt (actually expected it from a bit higher), but I'm not sure how far it will get. As far as I'm concerned, all this action is taking place within a consolidation pattern and so is just a lot of zig-zagging around within that pattern.

  James Brown   2/19/200,  10:22:56 AM
Sector winners this morning:
DDX disk drives index: +1.59%
SOX semiconductors: +1.11%
BTK biotech index: +1.01%

Sector losers:
XAU gold & silver: -1.98%
NWX networking: -0.67%

  Linda Piazza   2/19/200,  10:21:20 AM
Today's big rise in the TRAN pushed that index out of the upper Keltner channel, signaling that it's overbought on a short-term basis. As I've mentioned and as Jane mentioned in her excellent article last night, Keltner channels can give valid breakout signals, too. Such breakouts often are followed by a retreat toward central channel support, however, and the TRAN is retreating back into the channels. Central channel support is near 2912 but rising, but before the TRAN retreats that far, it's going to hit 2919.27, the site of the 38.2% retracement of the recent plunge and the top of the recent consolidation pattern. That should provide some support, so if it doesn't, we'll be more suspect of today's TRAN pattern.

  Jeff Bailey   2/19/200,  10:20:28 AM
Semiconductor Index (SOX.X) 528.28 +1.11% .... did see first 5-minute trade to high of 535.55, but has now come back into morning's gap, retracing just about 1/2 of that gap. If bulls can drive above morning highs, the should see bullishness continue to the close.

  Linda Piazza   2/19/200,  10:16:39 AM
The OEX has now descended toward mid-channel Keltner support and so far is holding there. Much support gathers between the current position and 569.90, so I would expect a bounce attempt from near this level. Keltner resistance now gathers rather strongly just over 571, however, so the battle wouldn't be over, even if the OEX should rise.

  Jonathan Levinson   2/19/200,  10:08:45 AM
Opening p/c ratio .73, VXO up 1.72% at 16.01.

  Linda Piazza   2/19/200,  10:07:17 AM
Don't look now, but the TRAN is at a two-day high today, building speculation that the recent pullback could be a bull-flag pullback beneath resistance. That resistance consisted of a 50% retracement of the recent plunge. The TRAN remains below that 50% retracement, however, and until it's safely sustaining values above that 2951.88 level, we still can't be sure that the bounce was anything more than a relief bounce.

  Jeff Bailey   2/19/200,  10:05:29 AM
Swing trade lower bearish stop alert ... With S&P Retail Index (RLX.X) 398.81 +1.18% breaking to all-time highs, I'm going to lower stop in Sears (S) $46.17 +0.67% to $46.52.

  Linda Piazza   2/19/200,  10:04:26 AM
The OEX now falls past first Keltner support. Next support is at 570.52, but stronger support now gathers from 569.86-569.99, where central Keltner channel support lies, also near the midpoint of the first five-minute range.

  Linda Piazza   2/19/200,  9:59:59 AM
Here's what I see on an OEX 60-minute chart: Link There's no breakout yet.

  Jonathan Levinson   2/19/200,  9:59:05 AM
A generous 6B overnight repo makes it 14B in intervention from the fed today, replacing 11.5 expiring for a net 2.5B addition.

  Linda Piazza   2/19/200,  9:55:36 AM
Today, even the first one-minute range on the OEX was a big one, but for those who would like to use Jeff's MRT system, but use that first one-minute range instead, the range extended from 568.33 to 570.37. According to the 1MRT system, the OEX would not have a bullish bias until it traded above 572.41, just above the latest descending trendline off the 2/11 high.

  Jonathan Levinson   2/19/200,  9:53:26 AM
Early release of the 10AM data.

  Jonathan Levinson   2/19/200,  9:53:12 AM

  Jeff Bailey   2/19/200,  9:53:00 AM
QQQ $37.81 +0.69% .... 5-minute bar charts show close of opening bar was $37.85, which is DAILY R2.

One thing to be cognizant of is Friday's option expiration, where traders might be cognizant of some gravitation toward the $37.00 level. Have seen a lot of trade around the $37.43 level last couple of weeks and I do think $38.00 is going to be some heavy resistance going into Friday's trade.

  Jonathan Levinson   2/19/200,  9:51:31 AM
Awaiting the LEI report at 10AM, est. 5%.

  Linda Piazza   2/19/200,  9:51:06 AM
So far, that first Keltner support I mentioned is holding, but the five-minute oscillators are just now completing a bearish cross, so it's possible that the testing isn't over yet. They could, of course, trend. Watch the 569.82 midpoint of the first five-minute range, too, if the OEX should decline further.

  Linda Piazza   2/19/200,  9:47:38 AM
Yesterday's OEX candle was an inside-day candle, with the body of yesterday's candle completely within the range of the previous day's candle body. That pattern would have been more classic if yesterday's entire range had been enclosed within the real candle body of the previous day, including the shadow, but for those who like to trade inside-day patterns, a break over yesterday's high of 571.57 would be considered a buy signal. As I've mentioned before, I've seen a few too many false breakout signals on these inside-day trades to trust them completely myself, especially since the OEX would not yet at that time have quite broken out of the consolidation pattern over recent days. Still, I thought I'd mention the pattern for those of you who do like to trade these patterns.

A break below yesterday's low would be considered a sell signal according to the inside-day technique, but again, that would occur while the OEX is still within the recent consolidation pattern.

  Jeff Bailey   2/19/200,  9:45:19 AM
NASDAQ Composite (COMPX) 2,092 +0.75% ... session high has been 2,094.92. While early, didn't sprint to 2,100.

  Linda Piazza   2/19/200,  9:43:07 AM
As the first retracement of the day begins, the OEX should find first Keltner support near 570.80-570.97, but we'll also be watching the 50% retracement of the first five-minute range.

  Jeff Bailey   2/19/200,  9:43:03 AM
Citigroup (C) $49.87 +0.62% ...

  Jeff Bailey   2/19/200,  9:42:33 AM
Sun Communities (SUI) $41.19 +0.65% ...

  Jeff Bailey   2/19/200,  9:41:56 AM
Sears (S) $46.06 +0.43% ....

  Jeff Bailey   2/19/200,  9:39:48 AM
Day trade stop alert ... NVLS $35.15

  Jeff Bailey   2/19/200,  9:39:03 AM
Newmont Mining (NEM) $43.52 -0.25% ... lows of the session. Taking out yesterday's lows.

  Linda Piazza   2/19/200,  9:36:20 AM
During the first five minutes of trading, the OEX spanned a huge range from 568.33 to 571.30, with a midpoint at 569.82, and with the OEX obviously above that midpoint.

  Linda Piazza   2/19/200,  9:33:17 AM
The OEX quickly climbs into and above the 569.50-570.50 resistance zone. A climb above 572 would constitute an upside breakout of the most recent consolidation pattern, although the OEX might then see resistance again near recent highs at 573.44. Traders should expect to see some resistance asserted near 572.

  Jeff Bailey   2/19/200,  9:31:12 AM
Novellus (NVLS) $35.30 +3.8% .... session low has been $35.16.

I have a near-term fitted retracement from $31.83-$35.95 on NVLS. Gives 80.9% at $35.16.

  Jonathan Levinson   2/19/200,  9:29:55 AM
11.5B in various repos expire today. 8B in 14-day repos have been announced thus far, and we await the 10AM announcement to determine the fate of the remaining 3.5B expiring.

  Jeff Bailey   2/19/200,  9:29:07 AM
Target Corp. (TGT) $42.29 ... indicated higher at $42.80 after reporting Q4 (January) EPS of $0.91 per share, which was 4 cents better than consensus. Revenues rose 10.7% year-over-year to $15.57 billion versus consensus of $15.61 billion.

  Jane Fox   2/19/200,  9:23:41 AM
Many large employers, from Citigroup to the Big Three auto companies, are forcing employees to get their prescription drugs through the mail rather than a local pharmacy. Mail-order drugs can be substantially cheaper in large part because the companies that sell them don't have as much overhead as retail pharmacies. Maybe why Express Scripts (ESRX) is doing so well.

  Jeff Bailey   2/19/200,  9:22:46 AM
Day trade raise bullish stop alert ... with Novellus (NVLS) trading $35.36 in pre-market, will raise bullish stop to $35.15.

This trade was profiled in last night's extended hours.

  Jane Fox   2/19/200,  9:16:16 AM
Jeffrey Skilling, the former Enron Corp. chief executive, turned himself in at the Houston FBI offices just before daybreak to face expected criminal charges related to the company's collapse. About 15 minutes later, his hands behind him in cuffs, he was placed in a car for the trip to the federal courthouse in downtown Houston. He was expected to appear later in the day before a federal judge on charges related to Enron's collapse. Is Kenneth Lay far behind?

  Jeff Bailey   2/19/200,  9:16:15 AM
09:00 Update at this Link

  Linda Piazza   2/19/200,  9:02:43 AM
As yesterday ended, the OEX had begun rising in what looked like a bear-flag formation toward resistance between 569-570.50, with several layers of resistance congregating in that zone. That resistance is comprised of the 30-minute and 60-minute 21-pma's, the central Keltner channel S/R, the 50% retracement of yesterday's drop, the daily pivot, and historical S/R. In the strictest sense, the OEX should break down before retracing higher than 569.50 or so if the current formation is some type of measured distribution pattern, but since it was finding support at the 30-minute 100-pma yesterday, I wouldn't be surprised to see a test of the 30-minute 21-pma at 570.48 before we really know how strong or weak the OEX might be today. A bounce from that 30-minute 100-pma should be a buy signal, but over the last week, the daily chart has been showing a series of lower highs and higher lows as the OEX coils near recent highs. Those who might have entered long yesterday on a move up from the 30-minute 100-pma or those choosing to enter long this morning must be aware that they're going long within a consolidation pattern that could still break either direction. Daily oscillator evidence remains mixed, too, supporting the idea that this is a consolidation pattern that could break either direction.

The short-term bias this morning is for a move up, with the possibility existing that the open could gap above or into that 569.50-570.50 resistance zone. Once the OEX is safely above that zone, it could be stopped just under 572, the site of the new descending trendline off the 2/11 high. A move over 572 would constitute an upside breakout, while a move below 567.80 would constitute a downside break out of that pattern. For those who follow pivot analysis (and even for those who don't), the weekly pivot as calculated by Q-charts is at 567.45, so I wouldn't enter a bearish position ahead of a break of that weekly pivot, too. In addition, the 30-minute 130-pma is at 567.34 as I type, so there's a lot of possible support between 567-568.

  Jonathan Levinson   2/19/200,  8:37:25 AM
Details: In the week ending Feb. 14, the advance figure for seasonally adjusted initial claims was 344,000, a decrease of 24,000 from the previous week's revised figure of 368,000. The 4-week moving average was 352,000, an increase of 250 from the previous week's revised average of 351,750.

  Jonathan Levinson   2/19/200,  8:33:14 AM
No other data on the wire by 8:33, looking like PPI will indeed be delayed.

  Jonathan Levinson   2/19/200,  8:31:20 AM
Initial claims 344K

  Jonathan Levinson   2/19/200,  8:21:41 AM
We await Initial claims at 8:30, est. 355K, Leading indicators at 10AM est. .5%, the Philly Fed at noon, est. 35. I'm trying to determine whether the PPI is going to be released agt 8:30 after all, but in any event, the estimate is for .4%, and .1% on the Core PPI.

  Linda Piazza   2/19/200,  7:00:40 AM
Good morning. The Nikkei opened near 10,750 and closed near that level, closing up 76.99 points or 0.72%, at 10,753.80. Between the open and the close, the Nikkei traded in a 90-point range. With the dollar rising against the yen in Thursday's trading, exporters and technology stocks gained. Automakers Toyota and Honda advanced, for example, but Honda also gained on the news that the company and Teledyne Continental Motors might collaborate in a joint venture to manufacture propeller engines for smaller planes in the U.S. Chip-related stocks such as Advantest and Tokyo Electron gained after AMAT's report last night. Excitement over Shinsea's IPO, launched in Thursday's trading, was credited both with boosting enthusiasm and pressuring other stocks, especially banking issues. One commentator equated Shinsea's IPO to a black hole that would absorb all available funds, and lead to the selling of less favored stocks to buy Shinsea stock.

Other Asian bourses turned in mixed performances. The Taiwan Weighted gained 1.15%, and South Korea's Kospi gained 0.52%. Singapore's Straits Times was flat, up 0.08%. Hong Kong's Hang Seng lost 0.44%, and China's Shanghai Composite was flat.

Despite a couple of high-profile misses or lowered expectations today, all European bourses except for Russia's Moscow Times trade higher this morning. Those high-profit misses include DaimlerChrysler, with the U.S. Chrysler division failing to meet expectations for operating profit in 2003 and selling fewer vehicles than in 2002. DaimlerChrysler did give an upbeat forecast for 2005 and 2006, mentioning the current product offensives and saying that the new vehicles from those offensives would become available then. In addition, Anglo-Dutch publisher Reed Bisevier shaved its 2004 earnings per share forecast, blaming a weak education market, low market growth, and a weak dollar. Dutch bank and insurer ING beat expectations and gave a cautiously optimistic outlook for the year. However, much focus was directed at the dollar's move higher after yesterday's record low against the euro, with some calling the bounce a technical bounce. Whether technical or not, it may have helped to firm the European bourses

As of this writing, the FTSE 100 trades higher by 58.40 points or 1.31%, at 4501.30. The CAC 40 has gained 34.78 points or 0.94%, to trade at 3743.80. The DAX has gained 34.59 points or 0.84%, to trade at 4129.93. All trade at or near their day's highs.

  Jeff Bailey   2/18/200,  10:25:21 PM
Video Game stocks .... Electronic Arts (ERTS) $46.66 +3.91% Link , Activision (ATVI) $21.24 +1.23% Link and THQ Inc. (THQI) $18.20 -0.54% Link

Received some focus today (Wednesday) from UBS. UBS saying that January video game industry data, which was reported by NPD, showed evidence of continued gains by industry leader ERTS, where software sales lead industry growth. Industry sales were up 8%, with software sales up 17.9%, which more than offset a 21.1% decline for console hardware.

ERTS maintained its top industry position, with sales up 49% and market share is estimated at 26%, up from year-ago's 21% market share.

UBS said it believes this bodes well for ERTS if not for the broader video gaming sector.

ATVI did trade a new 52-week high in today's session, helped in part by UBS saying it would buy the stock straight into "Spiderman 2" this summer. UBS added that ERTS numbers should eliminate fears of a sharp slowdown this quarter. THQI's all-time high was set in May of 2002 at $23.40.

UBS also noted that THQI and ATVI have analyst meetings this week, which could benefit these stocks near-term.

  OI Technical Staff   2/18/200,  9:38:30 PM
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